Lottery games have become a time honored method of raising revenue for state and federal governments the world over. Traditional scratch-off and draw games have evolved over decades, supplying increasing revenue year after year. However, after decades of growth, the sales curves associated with traditional games seem to be flattening out. This flattening of lottery sales curves is typically attributed to a fixed base of consumers that routinely purchase lottery products with very few new consumers choosing to participate in the lottery marketplace. Various analyses of state lottery sales data tend to support the hypothesis that lotteries rely heavily on an existing consumer base and more specifically on lottery “super users.” Three states (Rhode Island, South Dakota and Massachusetts) had 2014 lottery sales that topped $700 per capita. While ten states had per capita sales below $100, per capita sales for all state lotteries averaged almost $250. Demographically speaking, this existing base of lottery consumers is aging with younger consumers showing very little interest in participating in existing lottery offerings. Thus, the potential for ever-increasing lottery sales is increasingly problematic with the existing fixed base of consumers saturated. Consequently, both lotteries and their service providers are presently searching for new forms of gaming.
In addition to flattening sales, a static lottery consumer base is often cited as exploiting problem gamblers with various legislatures debating restrictions or probations being placed on lotteries. For example, “Stop Predatory Gambling”, which advocates an end to state-sponsored gambling recently stated: “State lotteries have a business model that's based on getting up to 70 to 80 percent of their revenue from 10 percent of the people that use the lottery . . . .” In Minnesota, a pending bipartisan bill would require 25% of lottery billboards to be dedicated to a warning about the odds of winning, cautions about addiction, and information on where problem gamblers can seek help.
In an attempt to diversify their base and increase sales, United States lotteries have come to appreciate the virtues of producing games with more entertainment value that can be sold at a premium price. For instance, ten-dollar instant ticket (i.e., scratch-off) games with higher paybacks and more ways to win now account for over $5 billion a year in United States lottery sales. But by their nature, high-volume, generic, higher priced instant games are a minor part of overall game offerings and although they have their place, they have limited potential for assisting in consumer base diversification. The high-priced and high-volume nature of these games tends to drive the lotteries to generic (i.e., proven) type of play (i.e., appealing to existing player base) with very little experimentation possible. Lastly, these higher priced and high-volume games also typically add little unique entertainment value relative to lower priced instant tickets and consequently do not to attract many new consumers.
In addition to lotteries, there are numerous contests and raffles that are classically used both as promotions and alternative methods for charitable organizations to raise funds. However, unless these contests and raffles are very large in scale they will by necessity offer only smaller prizes, thereby limiting their broad appeal.
Moreover, as gaming technology and systems continue to evolve and become more sophisticated, numerous new types of games and products become available that require discrete new methods of funding and enabling. Gaming trends no longer support gaming to the masses, rather differentiation through information is favored with gaming systems tracking and targeting using such concepts as: predictive value, frequency, platform game choice, average bet, etc. However, tracking and targeting gaming platforms to these concepts necessitates segmenting the player base into smaller and smaller groups or pools with each group or pool too small to sustain a viable prize fund by itself.
Some attempts have been made to enable funding of smaller lottery and other types of games. U.S. Pat. Nos. 6,588,747; 6,793,219; 7,213,811; 7,635,302; 7,635,304; 8,216,045; and 8,845,409 and United States Application Publications 2005/0164767 and 2010/0093419 all teach offering optional secondary or additional games or tiers with lottery tickets with a correspondingly smaller player base and associated prize fund. However, these optional secondary games as envisioned simply employ a subset prize fund of the primary game that is preordained with the creation of the primary game and do not anticipate prize funds across multiple smaller games. U.S. Pat. No. 7,407,436 teaches expanding the expected return of a game by dividing funds received into both a prize pool and an investment fund where assets are purchased with the investment fund, such that the overall expected return of the game over a given period of time is positive when compared to a static prize fund; but, this reference fails to specifically address increasing prize funds for multiple small lots of games or tickets. United States Application Publication 2005/0164767 teaches enhancing a prize fund by selling the risk to an outside entity; but again, this reference fails to specifically address increasing prize funds for small lots of games or tickets.
United States Application Publications 2003/0080507 and 2003/0125108 disclose that for the gaming industry, such as lottery-type games, games can be more exciting for consumers if larger payouts (e.g., one billion dollars) are offered. These larger payouts, with correspondingly long odds of winnings, are not necessarily won during any specific game genera play, but would essentially be offered as an additional drawing. Consequently these larger prizes require some entity to assume the risk. The '108 application discloses the use of financial instruments to hedge the risk with the '507 application expanding on the risk mitigation concept by essentially having insurance companies issue an insurance policy covering the large prize. However, neither of these applications addresses a fixed prize fund where prizes are financed solely by ticket sales, nor do they envision financing mid-tier prizes (e.g., $50, $100, $500, etc.) for small lots of games or tickets. Furthermore, neither application addresses the vexing problem of backward compatibility of their disclosed larger payout drawings with existing lottery validation systems.
Finally, United States Application Publication 2014/0187305 teaches sharing of a common prize fund across multiple Internet games with the various games employing different play styles, indicia, etc. by all drawing from a common prize fund. However, the '305 application still envisions a fixed prized fund with a priori knowledge of all game details (e.g., number of games, number of plays, types of prizes, etc.) established at the time of prize fund creation. While this type of a priori knowledge of game details is possible for Internet gaming due to the low production costs (i.e., practically zero) of per game play, the '305 application does not readily accommodate games with physical embodiments like instant tickets with a SOC where production costs and logistics are higher and economies of scale assume large print runs in the tens of millions. Additionally, the '305 application does not envision accommodating existing lottery retail venues of physical ticket redemption.
Thus, it is highly desirable to develop gaming systems platforms that provide methods of funding new gaming opportunities, particularly more customized and consequently smaller volume games. Ideally these gaming platforms should accommodate smaller pools of tickets that are not necessarily manufactured at the same time thereby allowing for flexibility and creativity for game designers to tailor games to a wide variety of small targeted segments as they become available hereunto not served by existing gaming offerings, in turn appealing to a broader base of consumers.